Whistling Past the OTT Video Graveyard

by
Brett Sappington | Apr. 3, 2019

Some people love being scared. Whether the villain is a poltergeist, masked killer, creepy doll, or some rabid beastie, they delight in having their worst fears realized on the screen of their choice. For some OTT services (and their executives), the horror show has been all too real. An increasing number of services are landing in the OTT video graveyard. Just as in many scary movies, the causes are all too predictable.

Big competition in a small niche. Many services focus on a particular genre or target user – either by strategic design (seeking to dominate a niche) or necessity (owning a particular set of content). But what do you do when the fishing hole is too small for all of the prospective anglers? Fandor, FilmStruck, and other services catering to the cinephile crowd faced this challenge, with multiple services chasing too few dollars. The result? Fandor and FilmStruck are pushing up daisies, and others in that space may be living on borrowed time.

Inability to capture niche audiences. At times, there may be little-to-no competition for a targetable niche, but services can’t convert them to paying users. MLS Live offered access to live soccer matches, but was unable to keep the doors open and eventually sold its rights to ESPN+. (ESPN+ is doing just fine, thank you.) Hortus TV targeted gardeners and had little competition, but couldn’t grow an audience. XtraFrame provided live access to bowling events…OK, that one seems self-evident. The bottom line: even with no competition, some services end up at the bottom of the river.

The trends are not in your favor. Catch the right trend or timing, and you can gain popularity almost overnight (I’m looking at you, Vine). For some OTT video services, market trends have gone in a different, terminal direction than what their founders expected. 3DGo! was betting that 3D TVs would be big. They weren’t. CinemaNow, Flixster Video, Sony Pictures Store and ULTRA were built with transactional models. While competition from Amazon didn’t help, consumers also decided that subscriptions were a better value. The result? One more video service metaphor about death.

Failing to meet internal expectations. For some horror flicks, the tortured hero seems to make it to safety at the end of the movie, only to have the baddie unexpectedly jump out and drag them to their doom (cue evil laughter and credits). Some video services appear to have achieved success in subscribers, only to be axed because their ROI did not meet internal expectations. This happened with Canadian service Shomi, which reached just under one million subscribers but was closed by parent companies Shaw Communications and Rogers Communications. DramaFever was closed by WarnerMedia (after previously being acquired by Warner Bros.) with executive statements that it just wasn’t able to achieve the success necessary for the new company.

Many companies enter the OTT video space with expectations of big revenues, eager consumers, and easy money. The reality is often quite different. Companies must accurately assess their content, target market, market potential, trends and internal expectations in order to have a shot at success. Even with these in order, services face a long, sometimes scary road past OTT video’s ever growing graveyard.